Fredriksen Ups Osprey Offering

Thursday, January 11, 2001

Norway's John Fredriksen raised his offer price for Singapore's Osprey Maritime by 12.5 percent in a move seen likely to result in a management change and possible de-listing of the group. Fredriksen, through his privately held World Shipholding Ltd., lifted his offer from S$1.00 to S$1.125 per share for the 38.85 percent of the tanker group he does not already own.
Osprey shares ended up 11 percent at S$1.11 after hitting a high of S$1.16. Volume was thin at 660,000 shares.
After the market close, the firm announced that its board member Charles Klotz had resigned effective January 10. It did not give a reason. The higher offer comes after criticism from Osprey management that World's initial offer undervalued the company. World's offer at S$1.00 was a steep discount to Osprey's net asset value of S$1.62 per share. World has said it plans to turn the Singapore group into a gas transporting company and sell other non-core shipping assets.
World, through its adviser DBS Bank, said in a statement it would also raise the price for redeemable cumulative preference shares from S$0.5435 to S$0.6115. The oil transportation giant gave no reason for the increased offers. World made a formal bid for Osprey on December 4 after breaching Singapore's takeover trigger of 25 percent. It said on Thursday it had received irrevocable undertakings from other major shareholders to accept the revised offers, including Osprey chairman Timothy Cottew and Indonesian-linked groups PT Samudra Petrindo Asia. This would bring World's stake in Osprey to 80.67 percent from about 61.15 percent. The offer is open until January 26.
While World has not said it plans to privatize and de-list Osprey, some analysts speculate the move could be on the cards. "They are going to privatize it. It's quite clear," said a shipping analyst at a Singapore bank securities firm.
He said it was likely World could boost its holding to 90 percent, after which it could force the remaining shareholders to sell their stakes and take the firm private. "There is no reason for Fredriksen to keep a listing status in Singapore. He could inject it into his listed vehicle in Europe with better valuations," the analyst said. Osprey management has been releasing information on the group to show minority shareholders that World's initial offer of S$1.00 "significantly undervalues" the company. Osprey said it expected to swing to a net profit of US$108 million for the year ended December 31 from a net loss of US$191 million in 1999. Its estimated net tangible assets per share as of December 31 stood at 93.68 U.S. cents, which works out at about S$1.62. - (Reuters)